Strength Of Health Clubs Grows Weaker In Virginia

Health clubs are becoming increasingly concerned about the way they look.

Since January 1989, nearly a quarter of Virginia's 148 registered health clubs have closed, including three this year, according to the state Division of Consumer Affairs.

Last year LivingWell Inc., which in October filed for Chapter 11 bankruptcy protection, closed its 16 clubs in Virginia. Between 68,000 to 90,000 members were affected by the decision. LivingWell operated eight clubs in Hampton Roads, including two on the Peninsula.

Three months later, the closing of Atlantic Health & Fitness in Chesapeake sparked efforts to change the state's health spa legislation. If signed into law by Gov. L. Douglas Wilder, the stricter regulations go into effect in July.

It's against this backdrop that the health club industry enters the 1990s.

More Americans are health conscious today than ever before, say club officials. Despite this, club operators must still come to grips with a slowing industry as well as the negative image they say is created by a small fraction of their number.

In Virginia, public trust in fitness centers is on the decline, say state officials. Recent club failures may have placed consumer trust in the industry at its lowest point since the mid-1980s, when legislation was first enacted to regulate the industry.

According to the state Division of Consumer Affairs, more complaints were filed in 1989 against health clubs than any other industry. Of the 100,000 calls received by the division, one-fourth involved fitness centers, said division Director Betty Blakemore.

Despite the problems some clubs have experienced, health club officials say the business remains strong.

"The bottom line is the foundation of the industry is very strong and getting stronger every year," said John McCarthy, executive director of the International Racquet Sports Association. The association is comprised of more than 1,600 for-profit health and fitness clubs.

In 1989, U.S. health clubs generated about $5 billion in revenues, according to IRSA spokeswoman Cathy McNeil. During the 1980s, the number of health and racquet sport clubs in the country doubled to the current estimated level of 15,000 to 20,000, with 9 million to 11 million members.

While the industry continues to grow, McNeil said this decade will not witness the huge percentage increases of the 1980s. In fact, McCarthy said that the number of clubs "in many parts of the country are outpacing demand."

Increased competition should begin forcing out weaker clubs during the next two to three years, McCarthy said. "The industry was very forgiving in the early '80s because it was very hot."

Club operators in some parts of the country say they must work harder to achieve good results, which might "weed out the people in it for a fast buck," McCarthy said.

Locally, club operators say they face an equally competitive market.

The Peninsula's fitness market is overbuilt, said M. Caroline Martin, executive vice president of Riverside Health System. Two clubs - Holiday Health & Fitness and US Fitness - operate within two miles of Riverside's Denbigh fitness center.

"It's a tough business in the sense that there's not a lot of margin," she said. "I don't think it's surprising there's a lot of fallout in the business."

In the '90s, "it will be small growth if there's growth," Martin said.

Phil Tipton, branch physical director for the Newport News YMCA, disagreed. Although the Peninsula market may be competitive, "I think there's more than enough people on the Peninsula that are health conscious, and it's growing, too."

Success in the 1990s, according to health club operators, will depend on several factors: diversity of services, location and securing a market niche.

From its royal blue and pink basketball court with glass backboards, to the indoor track with banked turns, it would be hard to mistake Sentara Hampton Health & Fitness Center, located off Magruder Boulevard for the sweat-infested gym of yore. In the carpeted locker room, members are provided with complimentary towels, blow dryers, and - for the ladies - moisturizer.

Don Jones, Sentara director, makes no bones about it: his is an upscale club. The center, which has nearly 2,400 members, places its focus on the 30 and older professional as well as senior citizens. As such the facility provides amenities that might not be available in the average gym.

"Anybody involved in the service end of the industry - and really means it - they'll be around," Jones said.

Riverside Health System operates Riverside Wellness and Fitness centers in Denbigh, Gloucester, Williamsburg, Norfolk and Richmond. Riverside's 5,000 members in Newport News - 14,000 throughout the system - place it alongside Holiday as the largest club on the Peninsula.